Tightening up belts will be the saving grace for consumers

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A possible interest rate hike and a projected petrol price increase send out a strong warning to South African consumers – SAVE!

That is the message from Ithala SOC Limited whose mandate is to serve ordinary South Africans and help them to manage their money and create wealth.

Ithala SOC Limited is a 100 percent owned subsidiary of Ithala Development Finance Corporation and the pioneers in banking the unbanked in KwaZulu-Natal.

The financial services provider outlines four key principles to help understand the journey to wealth creation and pave the way for financial progress:

  1. Get out of debt
  2. Start saving (Build an emergency fund)
  3. Start investing (Build a wealth fund)
  4. Build multiple sources of income

As part of an ongoing commitment to financial literacy, Ithala SOC Limited regularly interacts with consumers on issues of money management.

‘Starsaver’ is a national savings campaign which draws attention to the important role that volunteer bankers and financial sector professionals can play in educating the nation’s youth to become lifelong savers.

“As the festive season approaches, exercising discipline over expenditure that might be wasteful will be important so as not to fall prey to emotional buying.

“Deciding between needs versus wants will be beneficial after the Christmas tree is packed away,” said Sandile Xolo, Ithala SOC Limited’s Marketing and Communications Manager.

“You know you are in financial trouble when your gross monthly expenses exceed your income and when too much of your income is allocated to pay off your debt.”

He said seven basic steps can help get you out of the debt trap:

  • Step 1 – Reflect on how you got into debt
  • Step 2 – Change your bad spending habits
  • Step 3 – Figure out how much debt you have
  • Step 4 – Decide how much you can pay – and find ways to pay extra
  • Step 5 – Put together a plan
  • Step 6 – Pay off your debt
  • Step 7 – Don’t create any more debt

Depending on where you currently are on your journey to wealth creation, Ithala SOC Limited offers some valuable tips to steer you forward in the right direction towards financial progress.

  • Instead of shopping for fruit and vegetables in the supermarket, try shopping at your local farmers market or grow your own fresh produce in your backyard.
  • When doing grocery shopping, try to budget to buy your groceries once a month and buy in bulk to last you throughout the month. Bulk prices are also cheaper and will save you money in the long run.
  • Instead of buying meat from the supermarket, try purchasing from a wholesale meat supplier because prices are cheaper and the sources are the same.
  • Shop at wholesalers and buy your monthly necessities, like toilet paper, soap, and non-perishable foodstuff in bulk. You can share the purchases and expenses with neighbours and friends.
  • Try buying in-house branded goods from supermarkets, as they are relatively cheaper than external brands.
  • Do not shop when hungry, because an empty tummy leads to unnecessary purchases.
  • When shopping, look out for sales, discount deals, promotions, markdowns and combo deals e.g. ‘’three for the price of two’’
  • Collect loose change and deposit it in the bank – or collect loose change daily in an old tin and deposit its contents when it’s full
  • Instead of throwing old clothes, appliances and furniture away, sell them in at a local flea market or online
  • Commute by taxi or bus to save on travel costs to your destination. You will save even further, by buying a monthly train ticket to the CBD.
  • Wait for sales and buy gifts for all occasions throughout the year at the sale
  • If you drive to work, find out which of your work colleagues live close to you and start a lift club, thus saving on travel costs.
  • Save on lunch money – instead of buying lunch daily, prepare and bring lunch from home
  • Try to cut down on eating out and treat yourself to one indulgent restaurant meal a month.
  • Shop for clothing and other great essentials in central town as opposed to retail stores in a shopping mall.
  • Try to do your clothing shopping using cash as opposed to using accounts, to help you feel the pinch and curb your spending.
  • Save on hair expenses by doing your hair in a local township as opposed to a salon in the CBD.
  • Carry shopping bags wherever you go and reuse them to avoid buying new packets.
  • Save on your airtime by using SMSes and instant messages to communicate with people.
  • Save on travel and time costs by doing your banking on your cell phone or through internet banking.
  • When having a family or friend gathering/party/event, instead of going to expensive bars or restaurants, rather organise a bring-and-braai at someone’s house or collect money and cook a meal.
  • Have a “buy nothing week”; you will be surprised how much you can save.
  • If you receive money unexpectedly like tax returns from SARS, don’t spend it but save the money.

Ithala has a 58-year legacy of encouraging the people of KZN to save as a means to accumulate personal wealth.

A distribution network of 39 branches in KZN provides convenient transacting facilities. Ithala SOC Limited’s suite of offerings includes a range of key savings and investments products, transactional banking, retail, housing, insurance and lending products.

For more information visit www.myithala.co.za or call 031 366 2500 or follow #MoveToIthala.

Kgomotso More (right) of Ithala SOC Limited with learners during the ‘Starsaver’ campaign which educates youth to become lifelong savers